Disinvestment dept working on Niti Aayog’s stake sale proposal

The Union Cabinet on Thursday gave in-principle approval the proposals for strategic sale in PSUs.

Strategic sale in nearly two dozen companies is set to gather pace with the government having approved Niti Aayog’s proposals for such sales via auction. Based on the Niti Aayog’s recommendations, the disinvestment department and concerned ministries have started work on strategic sale in individual companies. The government had had last month approved the name of first strategic divestment candidate — Allahabad-based loss-making company Bharat Pumps and Compressors Ltd.

Apart from sale of partial stake in some companies, the administrative ministries and disinvestment department will also consider divestment of 100 per cent government equity in seven companies to a strategic buyer. These PSUs are Scooters India, Hindustan Prefabs, Bridge & Roof Company India, Project & Development Company India, Bharat Pump & Compressors, Pawan Hans and Central Electronics.

The Union Cabinet on Thursday gave in-principle approval the proposals for strategic sale in PSUs. Some companies that are proposed to the merged with similar PSUs include: Engineering Projects (India) Ltd, National Project Construction Corporation and Hospital Services Consultancy Corporation. Finance minister Arun Jaitley said on Thursday that specific strategic sale cases would now come up after a detailed examination as to how it is to be done in each case and the details with regard to the units concerned will be furnished at that stage.

In the Union Budget for 2016-17, the government has projected to raise Rs 20,500 crore from strategic stake sales and another Rs 36,000-crore from minority stake sales in various companies.

Niti Aayog has recommended PSUs for strategic divestment in two lots of 11 companies each. Apart from these, a third list of 74 sick and loss-making public sector undertakings was prepared, of which 26 are recommended to be closed, five for giving on long-term lease or transfer to states (these are mainly hotels), six for sale or transfer to states. Within these 74 units, 22 currently undergoing a revival plan were to be scrutinised again once the revival package is complete.

The last strategic sale took place in Jessop and Co in 2003-04 under the National Democratic Alliance government, when 72 per cent of government stake was sold to Indo Wagon Engineering for Rs 18.18 crore, as per data available with the Department of Investment and Public Asset Management. In the same year, the government had sold 18.92 per cent of its equity in Hindustan Zinc Ltd to Sterlite Opportunities & Venture Ltd for Rs 323.88 crore.